US Stocks close higher on Election Day (ext.CNN)

NEW YORK (CNNMoney) -- U.S. stocks gained ground Tuesday as voters went to the polls on Election Day to choose the next president of the United States.

The Dow Jones industrial average gained 133 points, or 1%. The S&P 500 rose 0.8%, while the Nasdaq added 0.4%.

For the past two weeks, stocks have been trading in a fairly narrow range as investors awaited the nation's election results.

"If we are lucky, we will know the winner by the end of the day because the worst-case scenario for the financial markets would be a stalemate that prolongs the process and involves the counting of thousands of absentee or provisional ballots," said Kathy Lien, Managing Director of FX Strategy. "Investors hate uncertainty and anything short of a clear victory will probably lead to weakness."

The outcome will set the tone for the debate over how to address the so-called "fiscal cliff" of tax hikes and spending cuts that goes into effect in January unless Congress acts. If lawmakers fail to address the fiscal cliff, they risk throwing the U.S. economy back into a recession.

While the latest national polls show that President Obama and Republican opponent Mitt Romney are neck-and-neck, the former Massachusetts governor is an overwhelming favorite of Wall Street, according to a CNNMoney survey of investment strategists and money managers.

Those who back Romney say that the country needs new leadership and new policies to address the fiscal cliff. They also say the candidate's promises to ease up on regulation and slash tax rates will benefit Corporate America.

Meanwhile, those who are supporting another four years for the Obama administration argue that a Romney victory would bring more uncertainty about whether the Federal Reserve's loose monetary policies, which have been credited for boosting the market during the past three years, would continue. Romney has been highly critical of Fed chairman Ben Bernanke.

Across the Atlantic, Greek lawmakers are expected to vote this week on reforms aimed at securing much-needed financial support, and the European Central Bank meets Thursday for its monthly policy discussion. 

Currencies and commodities: The dollar fell against the euro and the British pound but edged higher versus the Japanese yen.

Oil for December delivery rose $3.06 to $88.71 a barrel.

Gold futures for December delivery gained $31.80 to $1,715.00 an ounce.